Motorola Solutions Inc.
), a leader in the lucrative U.S. Public Safety market, is planning
to acquire Psion Plc for $200 million in cash. Per the deal,
Motorola Solutions will make a premium offer of $1.36 per share to
Psion. The deal is expected to close by the end of fiscal 2012,
subject to regulatory approvals.
Psion Plc develops mobile handheld computers, which are mainly
used for commercial and industrial purposes. It operates in 14
different countries and has served clients in more than 80
countries. Motorola Solutions believes that the acquisition of
Psion will not only bolster its mobile computing and hardware
portfolio but will also increase its presence in the international
market, thereby accelerating top- and bottom-line growth.
Motorola's business model remains compelling and we believe that
the company will be able to maintain its current top-line growth
going forward, primarily due to the critical nature of the public
safety network in the U.S. and massive growth potential in the
Despite these positives, we believe that a slowdown in
government expenditures due to budgetary pressures -- particularly
at the state and local levels -- may significantly jeopardize the
company's overall financials as the company is heavily dependent on
Sprint Nextel Corporation
), one of the company's largest customers, has decided to gradually
phase out the iDEN network, thus adding to the negative pressures.
We, thus, maintain our long-term Neutral recommendation on Motorola
Currently, Motorola Solutions Inc. has a Zacks #2 Rank, implying
a short-term Buy rating.
Motorola Solutions Inc., based in Schaumburg, Illinois, is a
leading communications equipment manufacturer, with a strong market
position in bar code scanning, wireless infrastructure gear and
MOTOROLA SOLUTN (MSI): Free Stock Analysis
SPRINT NEXTEL (S): Free Stock Analysis Report
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